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DOE Study Reveals Access Limitations

Restrictions in the Rockies

A study commissioned last year by the Department of Energy shows that access to large areas of federal lands in the gas-rich Rocky Mountains is more restricted than many previously thought.

Working on a township-by-township basis, analysts with Advanced Resources International studied federal lands in the Greater Green River Basin of Wyoming and Colorado and found that nearly 68 percent of the area's technically recoverable natural gas resource is either closed to development or under significant access restrictions.

Not only does that figure represent as much as 79 trillion cubic feet of natural gas that may never be produced, the new study's estimate also is much higher than the 40 percent estimation in a 1999 National Petroleum Council gas report.

The DOE study is part of a larger planned project to analyze natural gas resources under federal lands in all Rocky Mountain basins and access limitations on those lands. The Greater Green River Basin was chosen for the first report because it contains the largest amount of estimated technically recoverable natural gas resources in the Rockies.

"We must take every step to meet future demands for energy in an environmentally responsible fashion," U.S. Energy Secretary Spencer Abraham said when the study was released in the early summer. "Determining the scope of current restrictions on our ability to provide that energy is an important first step towards implementing the president's National Energy Policy."

DOE projections forecast that by 2020 Americans will be consuming more than 50 percent more natural gas than today. Based on that data, the Bush Administration's national energy policy calls for a review of public land status and lease stipulations that may be impeding oil and gas exploration and development.

The Greater Green River Basin study includes almost 29 million acres — 16 million of which are owned by the federal government. The area actually encompasses more than the Greater Green River Basin because it includes all the land area overseen by the Bureau of Land Management that contained any part of the basin.

BLM and the Forest Service control almost 99 percent of the federal lands in the study area.

Researchers used computerized geographic information system analysis for the study, and estimates of the recoverable natural gas were obtained mostly from the U.S. Geological Survey's 1995 national oil and gas assessment. For certain unconventional formations, estimates were acquired from DOE's natural gas research program.

The NPC's 1999 study recommended that government and industry should continue the work begun in its study to inventory existing information on the resource base in the Rockies, analyzing the impact of access restrictions. Accordingly, the DOE — in cooperation with the BLM and the Forest Service — initiated the project to develop detailed estimates of the technically recoverable volumes of natural gas resources.

In addition to the Greater Green River Basin, studies will be conducted for the Piceance-Uinta, San Juan, Powder River, Big Horn and other Rocky Mountain basins.

Case by Case Comparisons

Approximately 110 discrete lease stipulation types are represented in the study area, and the analysis outlines the potential natural gas resource that lies under various categories of restriction or stipulation.

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A study commissioned last year by the Department of Energy shows that access to large areas of federal lands in the gas-rich Rocky Mountains is more restricted than many previously thought.

Working on a township-by-township basis, analysts with Advanced Resources International studied federal lands in the Greater Green River Basin of Wyoming and Colorado and found that nearly 68 percent of the area's technically recoverable natural gas resource is either closed to development or under significant access restrictions.

Not only does that figure represent as much as 79 trillion cubic feet of natural gas that may never be produced, the new study's estimate also is much higher than the 40 percent estimation in a 1999 National Petroleum Council gas report.

The DOE study is part of a larger planned project to analyze natural gas resources under federal lands in all Rocky Mountain basins and access limitations on those lands. The Greater Green River Basin was chosen for the first report because it contains the largest amount of estimated technically recoverable natural gas resources in the Rockies.

"We must take every step to meet future demands for energy in an environmentally responsible fashion," U.S. Energy Secretary Spencer Abraham said when the study was released in the early summer. "Determining the scope of current restrictions on our ability to provide that energy is an important first step towards implementing the president's National Energy Policy."

DOE projections forecast that by 2020 Americans will be consuming more than 50 percent more natural gas than today. Based on that data, the Bush Administration's national energy policy calls for a review of public land status and lease stipulations that may be impeding oil and gas exploration and development.

The Greater Green River Basin study includes almost 29 million acres — 16 million of which are owned by the federal government. The area actually encompasses more than the Greater Green River Basin because it includes all the land area overseen by the Bureau of Land Management that contained any part of the basin.

BLM and the Forest Service control almost 99 percent of the federal lands in the study area.

Researchers used computerized geographic information system analysis for the study, and estimates of the recoverable natural gas were obtained mostly from the U.S. Geological Survey's 1995 national oil and gas assessment. For certain unconventional formations, estimates were acquired from DOE's natural gas research program.

The NPC's 1999 study recommended that government and industry should continue the work begun in its study to inventory existing information on the resource base in the Rockies, analyzing the impact of access restrictions. Accordingly, the DOE — in cooperation with the BLM and the Forest Service — initiated the project to develop detailed estimates of the technically recoverable volumes of natural gas resources.

In addition to the Greater Green River Basin, studies will be conducted for the Piceance-Uinta, San Juan, Powder River, Big Horn and other Rocky Mountain basins.

Case by Case Comparisons

Approximately 110 discrete lease stipulation types are represented in the study area, and the analysis outlines the potential natural gas resource that lies under various categories of restriction or stipulation.

To simplify the analysis and present meaningful results, the stipulations and federal land types were grouped into a hierarchy of categories. Drilling operations and access to natural gas resources are driven by the time during which drilling is prohibited — ranging from no access, to three-month incremental timing limitations, to standard lease terms.

The DOE study looked at "no access" areas, which include both statutorily defined areas like national parks and wilderness areas, and administratively defined areas, such as wilderness re-inventoried areas and roadless areas.

"No surface occupancy" stipulations, which prohibit all surface occupancy for oil and gas operations to protect special plant or animal habitats, were also treated as administrative "no access" zones.

The majority of stipulations are timing limitations that restrict the time of year oil and gas activities are allowed. The study also looked at controlled surface use stipulations, which control the surface location of natural gas and oil exploration and development activities on a lease by excluding them from certain parts of a lease.

Standard lease terms are those with no explicit stipulations.

Analysts compiled estimates for each township on:

  • A base case — applying all the stipulations covering the township.
  • A sensitivity case — assessing the natural gas resource impacts attributed to the practical implementation of the lease stipulations, based on discussions with government officials and industry.

Extended reach drilling applications and potential exemptions to lease stipulations are factored in the sensitivity case.

For example, for one township in the Greater Green River Basin, the base case indicated that gas resources impacted by no access zones totaled 67 million cubic feet of gas, including:

  • Timing limitations of six to nine months impacted 4.1 million cubic feet of gas.
  • Controlled surface use affected 51 million cubic feet of gas.
  • Standard lease terms covered 3.1 million cubic feet of gas.

However, under the sensitivity case that same township had:

  • No resources impacted by no access zones.
  • Three million cubic feet of gas resources covered by time limitations.
  • 221 million cubic feet by controlled surface use.
  • 4.1 million by standard lease terms.

For the entire study area the base case analysis showed that slightly over two-thirds of the federal technically recoverable natural gas resources are either closed to development or available with restrictions.

Also:

  • About 30 percent of the potential federal resources are off limits, with about 1 percent being closed by statute and the balance closed by administrative orders.
  • Various leasing stipulations restrict an additional 38 percent of the federal natural gas resources — and over 90 percent of these restrictions are due to timing limitations of between three to nine months, to protect such things as winter habitat for big game or nesting periods for sage grouse or raptors.
  • The remaining 32 percent of the federal resource is subject to standard lease terms, which still dictate that the leaseholders comply with a number of environmentally protective requirements.
  • The sensitivity case for the Greater Green River Basin indicated:
  • That the potential federal natural gas resources either closed to development or available with restrictions is about 53 percent.
  • The total potential resource that is completely off limits drops to 21 percent.
  • The resource covered by restrictions totals 32 percent.
  • Federal resources under standard lease terms rise to 47 percent under the sensitivity case.

Limiting Requirements

In addition to lease stipulations, the Greater Green River Basin study area is subject to other federal statutory requirements and discretionary requirements that can limit oil and gas activity.

These can be in the form of:

  • Conditions of approval often imposed on applications to drill.
  • The interpretations of some standard lease terms of BLM and Forest Service managers.
  • Outdated resource management plans.
  • Increased numbers of application permits to drill (APD) requests combined with inadequate BLM staffing to process the incoming APDs and associated site inspections.
  • Wetlands determinations.

Federal statutory requirements, in addition to the Air Quality Act and the Clean Water Act, include:

The National Historic Preservation Act.

The NHPA was established to preserve historic and cultural buildings, objects and antiquities thought to be of national significance and for other purposes. Petroleum industry officials indicate the language "for other purposes" is extremely broad and has the potential for prohibiting access in areas not deemed as cultural.

Private land owners in the "checkerboard" BLM areas are being petitioned with requests for cultural and endangered/threatened species searches on their private lands even though the minerals may be private. If a mineral company finds it necessary to gain access through private lands to a mineral lease on federal lands, the request is also made for a cultural and endangered/threatened/sensitive species search on private lands.

Industry officials say several landowners have indicated they will not submit to such searches and private mineral companies may be, therefore, precluded from access to federal minerals that appear to be leaseable on agency plans and maps.

The National Environmental Policy Act.

NEPA impacts actions of federal agencies and is at the root of much debate over the issue of access.

NEPA has been woven into the fabric of federal land management decision-making and has become the most important procedural public land management statute because it requires agencies to comply with its process in all situations where major actions are contemplated.

Petroleum industry officials interviewed for the DOE study noted that over the years "environment" has come to mean only the physical environment. In recent years, however, there have been demands that federal agencies adhere to the meaning in the law, which addresses both the physical environment and the human environment.

Socioeconomic impacts are not considered in all environmental impact statements and environmental assessments.

Both BLM and the Forest Service have developed manuals for applying NEPA in their land planning process, but the two agencies apply the law in different ways. Mitigation varies from project to project, with public interest and controversy often determining the standards in the decision making process.

Today each EIS and EA is heavily monitored and debated and/or appealed by specific interest groups. Decision-making based on NEPA often costs project developers time and money beyond reasonable limits.

Even with such extensive analysis and proper procedures, however, the number of appeals continues to escalate, amplifying the uncertainty to operators and escalating production costs.

According to the Gas Research Institute, in 1994 it cost between $60,000 to $250,000 to complete a large scale EA or EIS in a new field. The cumulative costs associated with access in the NEPA process can add $9,500 to $21,000 on a per well basis. Today those figures have escalated to $150,000 to $1.5 million for oil and gas projects — and the process can take up to two and a half years to complete.

The Endangered Species Act.

ESA generally requires all federal agencies to conserve listed species, but conserve is broadly interpreted and applied.

The U.S. Fish and Wildlife Service is responsible for the law, and the agency broadly prohibits "taking" any listed species. When any federal agency proposes a plan that may affect in any way the existence of an identified species a consultation with the FWS is required.

Anyone can petition to list a species, without scientific reasons.

Habitat for the species protected under the law also is protected.

Industry officials note that the far-reaching effects of this requirement has cost many natural gas projects time and money and in some cases completely prohibited development projects.

Lease stipulations and federal laws aren't the only things that can block access to potential natural gas resources. Conditions of Approval, which are discretionary requirements developed by the BLM over the years as mitigation for surface disturbing activities, have been a serious hindrance as well.

Industry spokesmen maintain that there is no standard means of identifying a condition of approval by a potential lessee.

Nearly 200 COAs address surface disturbing activities for users of BLM lands. Just some of the oil and gas activities covered by COAs include geophysical programs, drilling, well plugging, road construction and maintenance tanks and pits for fluid storage, pipeline and power line construction, management of noxious weeds and reclamation.

COAs and lease stipulations overlap, and industry officials say that there is no accurate record to classify land uses discretionary withdrawals — whether they are temporary and time limited or consistent and long term.

To truly characterize impacts, COA status of discretionary mandates need to be accounted for, which means the DOE study could be underestimating natural gas resource impacts from the perspective of the operators.

Digitized maps and other data from the study, which will allow users to examine restrictions for each township in the Greater Green River Basin, are available from the DOE office in Washington, D.C. The study also is available on the department's Web site, at www.fe.doe.govbetwausdaufq.

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